This newsletter was published 26.5.2021 at 4:41pm CEST

The current prices on the European carbon market are as follows:

EU carbon prices recovered sharply from previous week’s low at 48.61 EUR/EUA and gained more than 10 percent in one week. Although bull run from last week seems steady and strong there have been signs of indecision. Trading volume has declined in comparison to the last week. Tuesday’s auction offered buyers substantial discount over secondary market, which could be interpreted as bearish sign considering there was no auction on Monday. Some EU ETS member states have raised concerns about speculators affecting EUA price. The European Commission viewed it differently and stated that the EU ETS has become a mature and liquid market. EUAs have big impact on profitability of fossil fuel powered power plants, such as coal and gas. Romania is one of many countries that is planning to exit coal since higher carbon prices negatively affect their profit margins. Among many others, second largest utility in the country received more than 200 million EUR grant from the government, conditional on restructuring plan approval. Coal alternatives proposed by the Romanian government cover renewable energy sources, mostly wind and sun. To achieve a smooth transition, the goal is to produce more than 30% of electricity from renewables by the year 2030.

German power prices are unchanged since last week, with the front year contract trading at 66.10 EUR/MWh. API2 coal prices are up by 4.15 USD/tonne since last week, with the Cal22 contract trading at 81.25 USD/tonne. EUR/USD is unchanged since last week and is currently trading at 1.2230.

Price development of EUA Dec2020 futures contract